To address this, Congress passed Section 3121(s) and Section 3306(p). These provisions allow a related enterprise (the “common payer”) to be treated as a single employer for the purposes of the FICA and FUTA wage base, where the common payer (1) simultaneously employs the same employees with one or more affiliated enterprises and (2) pays the remuneration on behalf of its own enterprises and other associated enterprises that simultaneously employ the staff. Therefore, where a common payer pays all the wages of a worker from all associated enterprises in the group that simultaneously employ the employees concerned, the common payer is treated as the sole employer for the purposes of the FICA and FUTA, and a single FICA and FUTA wage base is in force. Large companies can consist of dozens of companies, each with its own pay slip. When employees move from one member company to another, the company may be subject to overtaxation of payroll tax. Two methods for some employers to consolidate pay slips and possibly avoid excessive tax collection are by a common payer or a Section 3504 agent. This concept can also be applied to the personnel of an acquired. The wages paid by the acquired unit are added to the wage base which is then maintained by the common unit of payers. However, the rule applies in this way only if the purchaser has acquired all of the purchaser`s property. The subsidiaries included in the agreement are jointly and severally liable for their respective shares for any payroll taxes to be paid by the joint payer.

An explanation of the basic elements of a joint payer agreement. However, the common rules on payment only apply where a worker is employed simultaneously by employers, one of whom must be the common payer. Concurrent employment means that the employee provides each company with services that compensate the employee through the payer, not just for the benefit of the employer group. Therefore, a common payer is not a practical method of consolidating pay slips in situations where staff are usually employed by only one member company at the same time. The last component is “simultaneous employment”, which is in Treas. Reg. Section 31.3121(s)-1(b)(3) is defined as the simultaneous existence of an employment relationship between a person and two or more enterprises. . . .